September 18, 2025 [Oil Price]- Abu Dhabi’s energy major ADNOC has pulled a $18.7-billion bid for Australia’s Santos as the two failed to reach an agreement on the valuation of the company and the terms of the deal.

The Australian company said in a news release that “The XRG Consortium would not agree to acceptable terms which protected the value of the Potential Transaction for Santos shareholders,” and that “would not agree to an appropriate allocation of risk between the XRG Consortium and Santos shareholders under the SIA. This included the obligation of the XRG Consortium to secure regulatory approvals and the provision of a reasonable commitment to the development and supply of domestic gas.”

News about the deal between Santos and the XRG consortium, which, besides ADNOC, included Carlyle, first emerged this summer. In June, the consortium entered a non-binding agreement with Santos for its takeover at a price of $18.7 billion, with Santos approving this valuation, which represented a 28% premium to the company’s stock price at the time.

It appears that, in the meantime, ADNOC and Carlyle got cold feet and withdrew their bid instead of signing the scheme implementation agreement they had struck with Santos ahead of the finalization of the deal.

Santos operates two large LNG facilities in Australia: Darwin LNG and Gladstone LNG. Santos is also the majority shareholders in the PNG LNG project in Papua New Guinea, after taking over Oil Search back in 2021. PNG LNG is considered one of the lowest-cost LNG projects globally and is the most attractive of its assets. The company also recently got the green light on another gas project, this time an onshore coal seam project, which will supply the local market and which will cost $2.3 billion to develop.

This is Santos’s third try to sell the business. Talks with local sector player Woodside Energy fell through as did negotiations with Harbour Energy back in 2018.